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Staff recommends no broad SAC exemptions; suggests targeted programs and annual review
Summary
City staff advised against broad exemptions to the sewer availability charge (SAC) and recommended targeted programs or case‑by‑case accommodations instead, while noting the Port Authority will design a small‑business assistance program and staff will review SAC and utility rates annually.
City staff reported back on research into possible exemptions or discounts to Bloomington’s sewer availability charge (SAC) and recommended the council not adopt broad exemptions for affordability, sustainability, or the South Loop district, while proposing alternative targeted tools and an annual review process.
Kim Bergen, community development director, reminded the council the SAC ordinance approved in December took effect in January and that no SAC fees have yet been collected; staff estimated the capital program associated with projected development through 2040 at roughly $54–55 million and said the SAC fee and projected utility rate increases were calculated to fund that work. Bergen said staff had been asked to research multiple exemption ideas — fee reductions to support affordability, discounts for low‑flow or other sustainability measures, and special treatment for the South Loop district — and concluded that none should be implemented as a city‑wide automatic exemption at this time.
On affordability, Bergen noted the Met Council offers a narrowly defined SAC discount for projects with project‑based subsidy and other restrictions (for example, no in‑unit garbage disposal or dishwasher) and said the city has other targeted tools to support affordable housing; staff recommended using those targeted programs rather than a general SAC exemption. For small businesses the city already administers Met Council SAC deferrals and a SAC credit program; the Port Authority is designing a complementary small‑business assistance program and has budgeted $50,000 to that end, Bergen said.
On sustainability, Bergen said the Met Council does not adjust SAC fees for low‑flow fixtures more broadly and that the region’s available SAC discount options are seldom used. Staff recommended not creating a broad sustainability exemption but continuing to pursue sustainability funding through other programs and partnerships.
Bergen also reviewed South Loop funding: historically the South Loop Development Fund has supported sewer capacity investments (she listed several projects totaling about $10 million over the last decade) and future projects in the district account for an estimated $14 million of the $55 million projection. Staff recommended retaining the citywide SAC structure rather than a special South Loop exemption but left the South Loop Development Fund on the table as a potential source for future capacity projects.
Finally, Bergen said the Met Council’s Industrial Capacity Charge (ICC) program — which allows some high‑use industrial customers to pay portions of their charges over time — is not currently addressed explicitly in the city ordinance; staff recommended clarifying the ordinance language and handling ICC requests or other high‑use industrial accommodations on a case‑by‑case basis rather than creating a new citywide program.
Council members pushed staff to continue dialogue with the private sector about how fees affect project feasibility and asked how grant funding would change fee calculations; staff said the SAC and projected utility rates will be reviewed annually and can be adjusted if major grants or other changes alter the capital plan. Councilor questions also raised concerns that stacked policy requirements and fees could complicate development economics; Bergen acknowledged those concerns and reiterated staff would monitor impacts and bring back adjustments or program proposals if needed.
